NYSE:UVV

Stock Analysis Report

Executive Summary

Universal Corporation engages in the supply of leaf tobacco products worldwide.

Rewards

Trading at 91.6% below its fair value

Pays a high and reliable dividend of 6.02%

Risk Analysis

No risks detected for UVV from our risk checks.


Snowflake Analysis

Established dividend payer and good value.


Similar Companies

Share Price & News

How has Universal's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: UVV has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.2%

UVV

-2.2%

US Tobacco

1.8%

US Market


1 Year Return

-12.0%

UVV

-7.9%

US Tobacco

20.1%

US Market

Return vs Industry: UVV underperformed the US Tobacco industry which returned -7.9% over the past year.

Return vs Market: UVV underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

UVVIndustryMarket
7 Day-1.2%-2.2%1.8%
30 Day-9.8%-11.6%1.4%
90 Day-0.06%-5.9%8.8%
1 Year-7.3%-12.0%-1.8%-7.9%22.7%20.1%
3 Year-14.4%-25.2%-27.4%-37.7%50.1%40.4%
5 Year33.1%7.7%2.6%-18.4%72.9%53.9%

Price Volatility Vs. Market

How volatile is Universal's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Universal undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: UVV ($50.47) is trading below our estimate of fair value ($601.21)

Significantly Below Fair Value: UVV is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: UVV is poor value based on its PE Ratio (14.5x) compared to the Tobacco industry average (14.1x).

PE vs Market: UVV is good value based on its PE Ratio (14.5x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate UVV's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: UVV is good value based on its PB Ratio (1x) compared to the US Tobacco industry average (3.5x).


Next Steps

Future Growth

How is Universal forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

11.4%

Forecasted Food, Beverage & Tobacco industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Universal has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Universal performed over the past 5 years?

1.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: UVV has high quality earnings.

Growing Profit Margin: UVV's current net profit margins (4.5%) are lower than last year (4.8%).


Past Earnings Growth Analysis

Earnings Trend: UVV's earnings have grown by 1.1% per year over the past 5 years.

Accelerating Growth: UVV's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: UVV had negative earnings growth (-15.3%) over the past year, making it difficult to compare to the Tobacco industry average (2.3%).


Return on Equity

High ROE: UVV's Return on Equity (6.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Universal's financial position?


Financial Position Analysis

Short Term Liabilities: UVV's short term assets ($1.6B) exceed its short term liabilities ($270.6M).

Long Term Liabilities: UVV's short term assets ($1.6B) exceed its long term liabilities ($526.9M).


Debt to Equity History and Analysis

Debt Level: UVV's debt to equity ratio (35.3%) is considered satisfactory.

Reducing Debt: UVV's debt to equity ratio has increased from 34.6% to 35.3% over the past 5 years.

Debt Coverage: UVV's debt is not well covered by operating cash flow (18.6%).

Interest Coverage: UVV's interest payments on its debt are well covered by EBIT (9.4x coverage).


Balance Sheet

Inventory Level: UVV has a high level of physical assets or inventory.

Debt Coverage by Assets: UVV's debt is covered by short term assets (assets are 3.3x debt).


Next Steps

Dividend

What is Universal's current dividend yield, its reliability and sustainability?

6.02%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Universal before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company6.0%marketbottom25%1.4%markettop25%3.7%industryaverage6.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: UVV's dividend (6.02%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: UVV's dividend (6.02%) is in the top 25% of dividend payers in the US market (3.68%)


Stability and Growth of Payments

Stable Dividend: UVV's dividends per share have been stable in the past 10 years.

Growing Dividend: UVV's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (86.9%), UVV's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.8yrs

Average management tenure


CEO

George Freeman (56yo)

11.8yrs

Tenure

US$5,346,387

Compensation

Mr. George C. Freeman, III, has been Chairman of Universal Corporation since August 5, 2008. Mr. Freeman has been Chief Executive Officer of Universal Corporation since April 1, 2008. Mr. Freeman has been  ...


CEO Compensation Analysis

Compensation vs Market: George's total compensation ($USD5.35M) is above average for companies of similar size in the US market ($USD3.74M).

Compensation vs Earnings: George's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
George Freeman
Chairman11.8yrsUS$5.35m0.58% $7.2m
Johan Kroner
Senior VP & CFO1.4yrsUS$1.09m0.0034% $42.5k
Airton Hentschke
COO & Senior VP4.8yrsUS$2.50m0.10% $1.3m
Preston Wigner
VP, General Counsel & Secretary14.3yrsUS$1.48m0.099% $1.2m
Theodore Broome
Executive VP & Sales Director of Universal Leaf Tobacco Company Inc8.8yrsUS$1.50m0.067% $831.9k
Harvard Smith
VP & Chief Compliance Officer0yrsno datano data
Candace Formacek
VP & Treasurer7.8yrsno data0.036% $443.5k
Scott Bleicher
VP & Controller0.7yrsno datano data
James Huffman
Senior Vice President of Information & Planning - Universal Leaf Tobacco Company12.5yrsno data0.031% $383.2k
Catherine Claiborne
VP & Assistant Secretary19.1yrsno data0.0049% $60.9k

8.8yrs

Average Tenure

56yo

Average Age

Experienced Management: UVV's management team is seasoned and experienced (8.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
George Freeman
Chairman11.8yrsUS$5.35m0.58% $7.2m
Thomas Johnson
Independent Director19.1yrsUS$187.38k0.062% $771.1k
Henry Harrell
Chairman Emeritus0yrsUS$1.82mno data
Allen King
Chairman Emeritus0yrsUS$117.00kno data
Robert Sledd
Independent Director10.5yrsUS$189.88k0.035% $433.7k
Lennart Freeman
Independent Director6.5yrsUS$189.88k0.023% $281.5k
Eddie Moore
Lead Independent Director3.5yrsUS$208.63k0.092% $1.1m
Thomas Tullidge
Independent Director1.5yrsUS$148.63k0.0040% $50.4k
Diana Cantor
Independent Director8.1yrsUS$187.38k0.030% $369.6k
Michael Lawton
Independent Director3.5yrsUS$188.63k0.0093% $115.3k

7.3yrs

Average Tenure

68yo

Average Age

Experienced Board: UVV's board of directors are considered experienced (7.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Universal Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Universal Corporation
  • Ticker: UVV
  • Exchange: NYSE
  • Founded: 1886
  • Industry: Tobacco
  • Sector: Food, Beverage & Tobacco
  • Market Cap: US$1.245b
  • Shares outstanding: 24.67m
  • Website: https://www.universalcorp.com

Number of Employees


Location

  • Universal Corporation
  • 9201 Forest Hill Avenue
  • Richmond
  • Virginia
  • 23235
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
UVVNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
UVVDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
0LJDLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968

Biography

Universal Corporation engages in the supply of leaf tobacco products worldwide. The company operates through North America, South America, Africa, Europe, Asia, Dark Air-Cured, Oriental, and Special Services segments. It is involved in procuring, financing, processing, packing, storing, and shipping leaf tobacco for sale to manufacturers of consumer tobacco products. The company contracts, purchases, processes, and sells flue-cured, burley, and oriental tobaccos that are primarily used in the manufacture of cigarettes; and dark air-cured tobaccos principally used in the manufacture of cigars, natural wrapped cigars and cigarillos, smokeless, and pipe tobacco products. It also provides value-added services, including blending, chemical, and physical testing of tobacco; service cutting for various manufacturers; manufacturing reconstituted leaf tobacco; just-in-time inventory management services; electronic nicotine delivery systems; e-liquid testing services; and smoke testing services for customers. In addition, the company offers testing services for crop protection agents and tobacco constituents in seed, leaf, and finished products, including e-cigarette liquids and vapors; and analytical services that include chemical compound testing in finished tobacco products and mainstream smoke, as well as engages in the research and development growth trials with various partners for non-tobacco agriproducts production, such as vanilla. Further, it produces and sells dehydrated and juiced fruit and vegetable products, as well as provides water pipe style leaf tobacco; and recycles waste materials from tobacco production. The company was founded in 1886 and is headquartered in Richmond, Virginia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 00:10
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.